What is a Debt Snowball?

A debt snowball is an extra lump sum payment you put toward paying off your debt every month.

Say that the minimum payments of all of your debts together add up to $1,000. Every month, you earn an extra $100 to pay on your debt. That $100 is your starting snowball.

Once you pay off your first debt of $250 per month, you add your original snowball of $100 to the $250 you were paying on the paid loan every month. Now your debt snowball is $350, and you start adding that to the minimum payment of the next debt on your payoff list.

As you “roll” your debt snowball, the extra amount you pay toward your debt grows larger and larger, much like when you roll a small snowball into the large bottom half of a snowman.

By the time you reach the last debt on your debt payoff plan, you’re not paying $100 extra every month anymore. You’re paying $100 + all of the minimum payments of the previous debts.

What Is a Debt Snowball Calculator?

A debt snowball calculator will help you plan your debt payments and tell you how long it will take you to clear your debt.

With a debt payoff planner, you can specify how much extra cash you can pay on your debt and figure out how that impacts your debt repayment plan.

A debt payoff calculator is an app, a spreadsheet, or an online calculator that optimizes the order you pay off your debts.

Usually you can select whether you want to start your debt payoff plan with the smallest to largest debt. Or you can choose to pay off the loans with the highest interest rates first (often referred to as the “avalanche method”).

How often you use a debt payoff planner is up to you – some people just use it once to figure the best order to pay their debts. Some people like to update it every week or month if they think it will change their debt payoff date.

How Does a Debt Snowball Calculator Work?

Before you use any debt snowball calculator, you’ll need the following:

A list of your debts

The amount of each debt

The interest rate charged for each debt

The length of the loan

How much extra money (your starting snowball) you can add to your debt payoff plan

You should be able to gather most of this information from your online account or the most recent statement you have from the credit card or loan company.

A debt snowball calculator is also useful to show you how earning extra income will affect your debt payoff plan. If you start a part-time job to pay down debt, you can plug your extra income into the calculator and it will tell you how an increase to your snowball will reduce your debt payoff time.

Strategies for Increasing Your Debt Snowball

If you’re unsatisfied with how long it will take you to pay off debt even with the snowball or avalanche strategy, there are a few strategies you can take to speed up the process.

Quit buying stuff.

Get paid for your opinion.

You can make money pretty easily by taking paid surveys. Companies want honest consumer feedback and are willing to pay for it. You don’t need to do this all day long – signing up with just two companies will bring you a steady survey side income. Check out the Best Paid Surveys for 2019.

Cut back on your everyday bills.

One way you can stop wasting money and improve your finances is by automating your finances with a trusted company called Trim. Trim makes it easy to find extra money to pay off debt since they automatically work with your service providers to get you the best rates. And what if you didn’t have to call each subscription you have to save money? Outsource the pain of recurring bills by signing up with Trim.

Reduce your retirement contributions until your debt is paid.

One way to gain traction on your debt repayment is to stop your retirement contributions until you’ve become debt free (or at least contribute only to the point where your company matches your contributions). Dave Ramsey recommends this strategy to people trying to become debt free; although this strategy is not for everyone, it may help you.

Declutter and pay down debt.

Go through every room, closet, and drawer in your home. Make a pile of items you’d be willing to sell. Choose a method of selling – whether online through money making apps or marketplaces or by hosting a garage sale. Then immediately post your items for sale or start advertising your yard sale. What’s left over you can donate but add the extra money you earn to your debt repayment plan for the year.

Best Online Debt Snowball Calculator List

I love the extensive features of this Nerdwallet Debt Payoff Calculator. You can access it from your desktop or phone. It’s easy to use – you simply enter your data and it spits out a debt free date, along with the dates you’ll be free of each individual debt.

You can also change the payoff order of your debts from snowball (lowest payment) to avalanche (highest interest rate) with just the toggle of a button. And by just moving the slider at the top, you can see how adding extra income affects your debt payoff.

What I like about the Undebt.it Snowball Payment Calculator is its simplicity. All of the info you need to get an accelerated debt payment plan is on one simple page. You can easily choose whether you’ll pay off your debts via the debt snowball (they call this debt stacking) or the avalanche method (the calculator easily lets you see which method gets you debt free faster).

Dave Ramsey is perhaps best known for popularizing the idea of the debt snowball. He advocates always starting with the smallest debt, regardless of interest rate. According to Dave Ramsey, the psychological benefit you experience when knocking out small debts and increasing your snowball is more motivating than starting with a larger higher interest rate debt.

This debt calculator, though Dave Ramsey is certainly the king of advocating this method of debt payoff, is rated near the bottom of the list because it doesn’t give you the necessary info up front. You will need to provide your email address to receive tailored results based on your debt and income.

Best Spreadsheet Debt Payoff Calculators

If you prefer a debt snowball calculator in spreadsheet form rather than desktop applications, check out Vertex 42’s Excel Debt Reduction Calendar. You can download this open source spreadsheet and quickly update your creditors, balances, rates, payments, and debt snowball amounts. You can even choose between avalanche or snowball methods.

The other benefit here is that if you have more than 10 creditors (some programs limit you) you can easily get an extended paid version for $9.95.

Another spreadsheet option is Squawkfox’s Debt Reduction Spreadsheet. I love the graphics and pie charts available with this debt snowball calculator – it also includes step-by-step instructions on how exactly to use it.

One noteworthy feature is that instead of telling you when you’ll be debt free, you can pick a specific date and it will tell you how much you’ll need to pay to achieve debt free by that date. That’s a huge bonus for people aiming to reach their goals in a specific time frame.

Best Printable Debt Payoff Planner

What I love about this hybrid spreadsheet/debt snowball printable is that you can enter your info – and then print the results in paper format. If you love to keep your debt payoff plan with your financial papers or hang them on the fridge so you can stay motivated by tracking your progress, this debt payoff planner is for you.

Simply Unscripted is here with a debt snowball printable to help if you prefer to keep track of your debt snowball on paper instead of online. You simply list your debts and decide how much you’ll pay over the month.

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